Amazon's stock has been a topic of intense scrutiny following its recent earnings report. Despite a selloff, Morningstar remains bullish on the e-commerce giant, assigning it a 4-star rating and a fair value estimate of $195 per share. This valuation is based on Amazon's wide economic moat, which includes network effects, cost advantages, intangible assets, and switching costs. The company's scale and technological prowess have allowed it to maintain a strong market position, even as traditional retailers invest heavily in e-commerce.

Amazon's financial strength is evident in its rapidly growing revenue, expanding margins, and strong balance sheet. The company's AWS and advertising segments are driving growth, while Prime memberships continue to attract and retain customers. However, regulatory concerns and increased spending on nontraditional areas, such as content production and logistics, pose risks to free cash flow growth.

Despite these challenges, Morningstar's Dan Romanoff believes Amazon's leadership position in e-commerce and cloud computing will remain intact, supported by the company's ability to invest in growth opportunities and drive customer experience. The stock's recent price is $192 per share, with a potential upside of 11.6% based on a $180 price target.